Self-hosted SAAS kind of defeats the purpose. The whole point of software as a service is to get rid of the overhead and cost of self hosting.
We deal with industrial customers in Germany. And they always ask about on premise setups. We can do multi tenant SAAS, we can do dedicated hosting (more expensive). But we won't really entertain on premise setups of our produce unless we are talking seven figure deals. That stuff just has to be expensive because it usually means hard to access (firewalled systems without internet access), obsolete (we installed a thingy in 1995!), and requiring lots of hand holding, integration overhead, and all the rest. It's doable technically but we're not going to be doing that for free and it's going to put an enormous burden on my team if we do it properly. That's the point of seven figure deals. It needs to cover all that cost, inconvenience, pain, etc. And it needs to be a sufficiently scary high number that customers will think twice about maybe not going for dedicated hosting instead.
The German industry is being dragged kicking and screaming into this century of course. But regardless, we deal with a lot of customers in various stages of completing their migration to SAP cloud, and otherwise modernizing their setups. They worry about compliance, certifications, etc. Those are the real obstacles.
Infrastructure hosting as a service is also becoming a thing of course. Self hosted no longer means having guys installing AC in your basement and mounting a lot of servers. You can get some nice managed data centers with decent support and all the rest. It's not that different from using cloud infrastructure. Spinning up a new machine might take a bit longer but there are tools and APIs for that. But otherwise it's not that different from a devops perspective. If you orchestrate that stuff properly, there's very little difference.
Paying a premium for public cloud is a thing that companies should question. But they probably shouldn't be buying, installing and managing a lot of hardware. Or be hiring a lot of expensive staff doing that kind of stuff.
> Self-hosted SAAS kind of defeats the purpose. The whole point of software as a service is to get rid of the overhead and cost of self hosting.
This is far from universally true.
SAAS for a lot of businesses is about lack of large upfront costs and lock-in.
The theoretic appeal is that instead of negotiating a large (possibly multi-million dollar) deal upfront, you instead pay a monthly or annual rate which includes an agreed upon level of ongoing support and you have the option of terminating the deal at your leisure. This incentivizes the service provider to offer a good enough level of service to try prevent you from dropping them.
In practice it can be more complicated depending on the particular product, for example migrating data between systems of different vendors can be very difficult or possibly even practically impossible, allowing the vendor to effectively lock you in and get away with sub-standard service.
Vendors who offer to manage and handle the hosting of their SAAS products for customers are just providing a feature to make their product more appealing to people looking for that.